Finance Minister Bill Morneau released his fiscal update Dec. 16 and the usual chorus quickly chimed in its holiday doom predictions.
Projections for the deficit in 2019-2020 and 2020-2021 grew by close to $8 billion each, with this year's projection $26.6 billion from the $19.8 billion projected in March. Next year went from $19.7 billion to $28.1 billion. Averaged out among an estimated 27.5 million taxpayers, it comes out to roughly $290 a head, though in reality lower-to-middle income Canadians are getting much if not all of their taxes back and part of the reason for the increase deficit is cuts to income taxes. Just to put the outrage in context.
Having our fiscal house in order is without a doubt a vital part of long-term hegemony, but over the years I have found the severity of deficits really gets contorted by partisan politics.
Take Alberta for example. For four years critics railed on the NDP for plugging the hole in Alberta's economy with spending, which resulted in a debt projection clearing $100 billion. Rachel Notley responded by putting any excess revenues towards cutting the deficit down.
By the time she was done, projections had gone from roughly $10 billion annually to $6.9 billion — modest, but not bad for a recession. Her successor, Jason Kenney, started off with a large multi-year corporate tax cut before even laying out a budget. His deficit numbers don't end up looking much different than hers, in spite of $1.3 billion in cuts to government services. Meanwhile, in Ontario Doug Ford inherited a $7.4 billion deficit from Kathleen Wynne. Now, it's $9 billion.
Provincial budgets include things like healthcare spending, so presumably fiscal decisions of major economies will have a more immediate effect on individual Canadians, yet critics are concerned with the Liberal deficit.
Appeasing these voices has had real world consequences.
In Inuvik, we have a utilidor system now proceeding into its third lifespan. A wonderful testament to the skill of the engineers who built it, I hope said engineers went on to work at NASA. But we're not talking about a cat or Voyagers 1 & 2. This is infrastructure vital to the day-to-day life of everyone in a town that now has to find $20 million to prevent "catastrophic failure" and $80 million to replace.
We can't fault our councillors or administrators or public workers for how long this has taken. I would be willing to bet for decades this was taken to minister after minister in Ottawa, who divided the cost by the population and decided to let the next MP get the glory. But here we are.
Reality check for fiscal hawks — Canada has some long overdue bills to pay. We have boil water advisories in people's communities, some that have been there for decades. Much of the military's equipment is falling apart. They need literally just about everything, especially given the current global theatre.
Oh, and we have the climate change candle burning at both ends, in both greenhouse gas emissions and trying to mitigate the consequences of those emissions. Those who have done the math say we should expecting at least the same level of spending as we did to stop the Nazis in the Second World War. Dealing with all this is going to cost a lot of money.
Any successful entrepreneur knows you can't build a venture out of nothing. You need investments and loans to get started i.e. money you eventually pay back.
How is nation building any different?